2024-04-22

Guiding Question and Hypothesis

We will explore how interest rate levels of Mortgages, Credit Cards, Auto Loans,and Student Loans effect the

  • Total Dollar Amount of Loans
  • Number of Loans
  • Delinquency of Loan Payments

Our initial hypothesis is that high level of interest rates will lead to

  • Lower Total Dollar Amount of Loans
  • Lower Number of Loans
  • Higher Delinquency of Loan Payments for each of the 4 types of loans we are analyzing.

Data Background

  • Data Overview
    • Have quarterly data on the interest rates, debt statistics, salary, and CPI dating back to 2003.
  • Data Collection
    • The data pertaining to debt was collected from the New York Fed Center for Microeconomic Data
    • Consumer Price Index (CPI) data was collected from the US Bureau of Labor Statistics
    • The interest rates for Mortgages, 48 Month Auto Loans, and the Credit Card data was collected from the St. Louis Federal Reserve
    • The student loan interest rate data was collected from the FASFA website

Data Manipulation

  • All tables were joined together on the Year and Quarter
  • Had to adjust the Total Dollar Loan Amount to account for inflation. This was done by

Adjusted Amount = (Unadjusted Amount / CPI for Quarter) * 100

  • We had monthly CPI data and took average across months to convert the CPI data to quarterly.

Plot

Plot

Interest Rates and 90 Day Deliquency